Commonwealth Numbered Regulations - Explanatory Statements

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INSURANCE CONTRACTS REGULATIONS (AMENDMENT) 1997 NO. 238

STATUTORY RULES 1997 No. 238

Issued by the authority of the Assistant Treasurer

Insurance Contracts Act 1984

Insurance Contracts Regulations (Amendment)

The Insurance Contracts Act 1984 (the Act) and the Insurance Contracts Regulations (the Principal Regulations) provide for a fair balance between the interests of insurers, insureds and other members of the public. The Act ensures that the terms of contracts of insurance, and the practices of insurers, in relation to such contracts, are fair and reasonable.

Section 78 of the Act provides that the Governor-General may make Regulations for the purposes of the Act.

Section 11F of the Act provides for secrecy in respect of information acquired for purposes of the Act. The Financial Laws Amendment Act 1997, which commenced on 30 June 1997, amended Section 11F such that information may be disclosed to prescribed financial sector supervisory agencies, law enforcement agencies and overseas financial sector supervisory agencies.

The regulations amend the Principal Regulations to prescribe financial sector supervisory agencies, law enforcement agencies and overseas financial sector supervisory agencies to whom a compliance officer, pursuant to Section 11F of the Act, may disclose protected information or documents acquired in the course of performing his or her duties.

Section 11F and the amendments to the Principal Regulations are aimed at facilitating the ability of the Insurance and Superannuation Commission to act quickly to exchange information to prevent and/or manage a crisis situation within financial conglomerates.

The regulations are described in detail in the attachment.

ATTACHMENT

Regulation 1- Amendment

Regulation, 1 is explanatory, and includes a note that these regulations commence on gazettal.

Regulation 2 - New Regulations 36, 37 and 38

Regulation 2 inserts three new regulations, 36, 37 and 38 into the Principal Regulations, for the purposes of Section 11F of the Act.

Regulation 36 - Financial sector supervisory agency

Section 11F of the Act generally prohibits a compliance officer from disclosing protected information or producing protected documents, other than for the purposes of the Act or any other Act administered by the Insurance and Superannuation Commissioner, that have been acquired by the compliance officer in the course of performing his or her duties as a compliance officer.

Certain exceptions to this general rule are provided for in section 11F. Paragraph 11F(4)(c) provides that protected information may be disclosed, or protected documents produced, to a financial sector supervisory agency for the purposes of the performance of any of the agency's functions or the exercise of any of its powers.

'Financial sector supervisory agency' is defined in subsection 11F(1) of the Act as meaning 'a person or body declared by the regulations to be a financial sector supervisory agency for the purposes of this section'.

Regulation 36 prescribes the financial sector supervisory agencies for the purposes of subsection 11F(1) of the Act.

Regulation 37 - Law enforcement agency

Section 1 IF of the Act generally prohibits a compliance officer from disclosing protected information or producing protected documents, other than for the purposes of the Act or any other Act administered by the Insurance and Superannuation Commissioner, that have been acquired by the compliance officer in the course of performing his or her duties as a compliance officer.

Certain exceptions to this general rule are provided for in section 11F. Paragraph 11F(5)(a) and subsection 11F(6) provide that protected information may be disclosed, or protected documents produced, to a law enforcement agency for the purposes of the performance by the agency of its functions in relation to an offence or alleged offence against a law of the Commonwealth, of a State or of a Territory.

'Law enforcement agency' is defined in subsection 11F(1) of the Act as meaning 'a person or body declared by the regulations to be a law enforcement agency for the purposes of this section'.

Regulation 37 prescribes the law enforcement agencies for the purposes of subsection 11F(1) of the Act.

Regulation 38 - Overseas financial sector supervisory agency

Section 11F of the Act generally prohibits a compliance officer from disclosing protected information or producing protected documents, other than for the purposes of the Act or any other Act administered by the Insurance and Superannuation Commissioner, that have been acquired by the compliance officer in the course of performing his or her duties as a compliance officer.

Certain exceptions to this general rule are provided for in section 11F. Paragraph 11F(4)(d) provides that protected information may be disclosed, or protected documents produced, to an overseas financial sector supervisory agency for the purposes of the performance of any of the agency's functions or the exercise of any of its powers.

'Overseas financial sector supervisory agency' is defined in subsection 11F(1) of the Act as meaning 'a person or body declared by the regulations to be, an overseas financial sector supervisory agency for the purposes of this section'.

Regulation 38 prescribes the overseas financial sector, supervisory agencies for the purposes of subsection 11F(1) of the Act.